It has been rough for many retailers to keep up with online shopping trends in recent years. Amazon has pretty much taken over. However, the larger retailer stores, like Walmart and Target, have seemingly been able to keep up. The latest quarterly report shows that Target shares are up 10 percent. So, how is the retailer still playing ball with the likes of Amazon?
Target Shares Jump 10%
Target shares soared Wednesday after the company released its first-quarter earnings. Sales topped all analysts’ expectations. Not only did the retailer bring even more people into its physical stores, but online commerce increased by 42 percent.
For online shoppers, Target offers something Amazon cannot: curbside pickup for online orders. This and its ability to continue getting shoppers in their stores, Target shares increased by 10 percent. Compared to what analysts predicted, here is how Target performed in the first quarter.
- Analysts expected to see $1.43 per share. Target saw $1.53 in reality.
- Target also blew expected revenue numbers out of the water. It saw $17.63 billion versus $17.52 billion in expected revenue.
- Additionally, Target saw same-store sales growth of 4.8 percent (compared to 4.2 percent expected growth).
Brian Cornell, CEO of Target, believes the company is well-positioned to continue to perform well throughout the rest of 2019, despite the threat of 25 percent tariffs on items imported from China. “We continue to see a healthy economic backdrop for our business,” he said.
Cornell anticipates this to be true for 2019 and beyond. But how is Target keeping up with the likes of Amazon, where you can buy practically anything, and offers same-day shipping in some areas of the country?
Why Target is Still Thriving
When it comes to retail, many investors are becoming nervous. Macy’s, Kohl’s, and Nordstrom are all failing to keep up with the online shopping trend. However, as you can see above, Target is continuing to grow. If you look at Target’s efforts to keep up with online retailers, you’ll know why it is thriving.
First, Target has implemented an ambitious remodeling plan throughout 400 of its stores. It plans to remodel another 300 stores this year and another 300 in 2020. The remodels have focused on improving apparel, cosmetics, electronics, and grocery sections of the stores. In many cases, it includes expanding each of those departments along with online pickup spots.
These fresher looking retail locations have more people wanting to go into Target to shop. Even if customers aren’t coming into the store, it seems their online shopping experience is desirable as well. Target, according to consumers, is offering a seamless shopping experience from online to pick up.
On top of that, Target is offering more competitive pricing in the grocery on food and other household items as well. So, there is no wonder was Target shares are up and there’s no sign of it slowing down any time soon either.
Photo: Mike Mozart